This applicant plans to study the determinants of adolescent smoking and depression, as well as their separate and combined effects on student performance. These issues are of great interest to policy makers due to their long-term impact on public health. Policy interventions in these areas have been based largely on past research findings that either assume a level of homogeneity between individuals that may not be appropriate, or cannot control for endogeneity concerns in establishing causality. This proposal will utilize a unique panel dataset of 1100 adolescents that also includes genetic markers. By exploiting the endogenous variation in these markers and their predictive effect on adolescent smoking and health (in this case, depression), two main questions of interest can be answered: 1) Are current models of smoking demand and depression among youth biased when account is not taken of genetic variation among individualsisn't accounted for 2) What is the true impact of smoking status and depression on GPA over time? To answer the first question, a single stage OLS estimation strategy will be employed, comparing estimators of smoking and depression with and without genetic markers. Question2 will be considered using a two-staged least squares estimator that utilizes genetic variation as an instrumental variable (IV). The interdisciplinary support provided by the health economists, psychologists and physicians on the applicant's committee serves to ensure that these analytical goals are within reach and will be translated for, and disseminated to, a wide variety of audiences. This research is of particular relevance to policy makers for 2 reasons. First, the questions it seeks to address are areas highlighted in related documents, including Healthy People 2010, as public health priorities. These priorities include reducing cigarette usage and depression among adolescents, and improving educational outcomes (which have been linked to improved health outcomes in the future). Second, it pioneers in the use of genetic markers as a tool for researchers to better understand health and other economic behaviors.